Economic Trends and Domestic Debates of Russia

China International Studies | 作者: Feng Shaolei | 时间: 2014-03-28 | 责编: Li Xiaoyu
Adjust font size: + -

 

By Feng Shaolei

  

 

I. The Deep Roots of Economic Fluctuation in Russia

 

1. Russia’s economic downturn in the first half of 2013

At a State Duma meeting in September 2013, Russian Finance Minister Anton Siluanov announced that the Russian economy had grown by 4 percent in the first half of 2013 and was projected to grow by 2.1 percent in the second half of the year. Shortly thereafter, international financial organizations revised their 2013 and 2014 projections for the Russian economy. The International Monetary Fund was the first to change its economic forecast, slashing Russia’s economic growth in 2013 from 2.5 percent to 1.5 percent and lowering the 2014 growth forecast from 3.25 percent to 3 percent. With regards to inflation, the IMF raised Russia’s projected inflation rate to 6.2 percent in 2013 (the forecast of Russia’s central bank is 5 percent) and projected that it would reach 5.3 percent in 2014.

Meanwhile, the World Bank lowered its forecast for Russia’s economic growth in 2013 from 2.3 percent to 1.8 percent and cut the 2014 forecast from 3.5 percent to 3.1 percent. The World Bank made their revisions based on similar grounds as the IMF – namely, that Russia’s economic model had run out of steam and that its lackluster economic growth was due to feeble demand. A high dependence on oil and gas exports, a lack of competitive industries and the structure of its market have all contributed to Russia’s slumping demand.

Due to uncertainty involving Russia’s future development model, all major economic players appear to be “awaiting institutional changes.” Investment intentions have considerably declined and demand has consequently shrunk. According to estimates made by the Russian Federal State Statistics Service, Russia’s investment witnessed a 1.4 percent decline year-on-year in the first half of 2013; investment in July and August dropped even further by 2.5 and 3.9 percent compared with the previous year. Russia’s economic sectors estimated that the country’s 2.5 percent investment growth target for 2013 had not been attained. Analysts from the Gaidar Institute for Economic Policy said that there are reasons to cast doubt on the government’s growth targets, including its 3.9 percent investment target for 2014, 5.6 percent for 2015, and 6 percent for 2016.

Russia’s Economic Development Minister, Alexey Ulyukaev, did not rule out the possibility that the country’s economic growth in 2013 could sink below 1.8 percent. In the context of global market instability, the European Union market, which holds roughly half of Russia’s foreign trade shares, could at best have a neutral effect – and very likely have a negative effect – on Russia’s economy.

Russia’s social concerns are similarly worrisome. In its 2014 fiscal budget, spending on healthcare and education were cut by 25 percent and 16 percent respectively. Such fiscal austerity will result in a considerable reduction or merging of research institutes under the Russian Academy of Sciences. This has in turn caused grave concerns among social elites, especially in Russia’s traditional intellectual circles. In a talk show in June 2013 (ominous titled “Russia’s political landscape and social mentality a year after the election: the start of stagnation or a temporary calmness?”), a range of leading Russian experts expressed deep concerns over Russia’s current social and economic developments. Some even jumped to the conclusion that instability is overwhelming the government’s ability to maintain control. In the words of Russian statesman Alexey Ulyukaev, “stagnation may be worse than a crisis, as a country can recover from a crisis, but stagnation will simmer [and cause] long-term, unpredictable consequences.”

 

2. Trend analysis of the economic downturn

A range of medium and long-term economic trends are affecting Russia’s economic downturn. According to analysts from the Gaidar Institute, the recovery of the Russian economy after the 2008-09 global financial crisis has come to an end, and its resource and export-driven growth model has reached a critical inflexion point. Foreign investment is dwindling and domestic demand growth has slowed due to the completion of various infrastructure projects. The prospects for Russia’s long-term economic growth now appear very different from how they looked during the booming first decade of the 21st century. The global economic downturn and the European debt crisis are also seriously restricting Russia’s export growth.

It is not all gloom, however, and Russia has some prospects for bolstering its economic growth. Experts at the Gaidai Institute suggest boosting domestic demand by raising standard wage levels, increasing fiscal inputs and expanding lending. Despite an increase in expenditures, the federal budget deficit has declined to a relatively low level. Compared with pre-crisis levels, Russia’s sovereign wealth fund has been replenished. Against the backdrop of shrinking foreign investment, the number of investment proposals is still on the rise due to the refinancing capabilities of the Russian banking system. This said, after big state projects are completed, investment project funding will decline, which will weaken investment initiatives.

Under the influence of the above factors, the Russian economy will enter a new phase: only slow growth can be expected, even if exports maintain high paced growth.

 

3. Structural background of a low growth rate

In 2012, the Russian economy managed to grow by 4.3 percent, a slight increase from 3.4 percent in 2011; meanwhile, the world economy reported a slower growth of only 3.1 percent. The United States economy grew by a meager 2 percent in 2012 while Eurozone growth fell to 0.6 percent. When viewed in comparison to previous quarters, however, Russia’s economy has suffered severely from the world economic slowdown and Europe’s economic woes. The negative influences have extended to Russia’s manufacturing and other export sectors. When compared to its bumper agricultural harvest and high investment levels in 2011, the Russian economy began to slow down in 2012. All previous measures – which have included increasing budgetary outlays targeted at social programs, accelerating commercial activities and expanding the scale of financial activities – have failed to reverse this trend.

On the whole, Russia’s slowing internal growth poses a serious risk to its economy. At the same time, the effects of the post-crisis economic recovery are dissipating, a trend that is naturally exhausting the potential for expanding production, demand and investment.

From a general economic respective, global energy prices have remained at a relatively high and stable level, buoying Russia’s export growth. These revenues and others have been sufficient to support Russia’s expanding demand, as well as its productive and non-productive activities. Expanding production has guaranteed a relatively high employment rate and wage income increment. Aside from income increases from production activities, household demand is also related to government spending and credit expansion policies.

However, these positive forces have failed to curb the slowdown of Russia’s capital input. In a report titled “Barriers and Prospects of Russia’s Natural Gas Export,” the Russian Center for Macroeconomic Analysis and Short-term Forecasting noted that “the declining momentum of natural gas export prices and volumes from the previous year continued in early 2013 [and] we have enough reasons to forecast that declining export prices and volume will probably continue in the middle and long-run.” This trend has been caused by changes in the European market and Russia’s failure to swiftly shift its demand focus to the Asian market.

As for other sectors in the Russian economy, some have undergone post-crisis recoveries, with consumer goods production recovering most rapidly. The food industry, for instance, has recorded 9.8 percent growth, and the textile industry, which started to recover at the end of 2012, has expanded nearly 50 percent from the same period in 2007. Shoe and leather production has recorded slightly slower growth but was still up 24 percent from 2007. Processing and other related industrial sectors, however, have registered only meager growth.

For example, the total output of cars, trailers and semi-trailers has only grown by 7 percent since 2007, and the production of lorries has remained almost unchanged. Meanwhile, the output of cars shrunk by 13.3 percent. The recovery and expansion of industrial production has remained disappointing and unstable. The production of trucks and machine equipment fell by 54.6 percent in 10 months and was only at 72 percent of pre-crisis levels by the end of 2012. The output of metal products, too, recovered to 97.5 percent of its pre-crisis level.

 

4. Correlative changes among investment, inflation and domestic demand

Diverging from mature market economies, Russia has displayed a correlation between investment, inflation and domestic demand that is very distinct from other economies, exhibiting its own characteristics.

A decrease in the inflow of financial resources is an important cause of Russia’s economic turmoil. In 2007, capital inflows accounted for 9.5 percent of Russia’s gross domestic product, but this share dropped substantially to 1.5 percent in the direct aftermath of the crisis. At the same time, remarkable changes have transpired in the global capital flow, with the world’s political and economic center gradually shifting towards Asia. Russia’s capital outflow has become a matter of domestic concern.

Russia’s fund market has not played an optimal role. Between 2008 and 2012, total corporate financial investment in Russia expanded threefold, but the input marked for financial operations amounted to less than 92 billion Russian rubles (about $3 billion), a figure that was even lower than the level in 2007. Bonds and shares issued by corporate entities accounted for one percent of the financing volume in the Russian investment market, compared with 50 percent in the United States securities market. According to 2012 data from Russia’s stock market, the capital level in Russia’s securities market was less than 44.4 percent of its GDP. Instability in the global financial system has also had a severe impact on Russia’s equity market. Russia’s securities market has been highly dependent on foreign investment, but at a time of economic volatility, foreign investors want to sell Russian shares and pocket returns in order to evade any possible risks.

Russia’s inflation slid to a historical low of 6.1 percent in 2011, but then it soared to 6.6 percent a year later. The tax revenues from non-productive commodities, along with commodity prices, have not recorded a rapid rise, but there has been a jump in consumer goods inflation. Many Russian experts now believe that currency changes in opposition to the country’s regulators: household currency incomes rose 4.4 percent in 2012, up from 0.5 percent in 2011; and the purchasing power of the Russian ruble declined by 1.5 percent during the same period.

In Russia, wholesale prices remain relatively low, but changes in the country’s domestic commodity prices will inevitably rebound with the global recovery. The price of wheat on the Russian market was less than half of the world average in 2010 and was only 39 percent of the global price in 2012. Russia’s domestic food prices rose by 7.5 percent in 2012.

In 2012, the growth of Russia’s domestic corporate profits experienced some changes and the growth of household incomes became less prominent. The country’s domestic demand grew by 6.4 percent in 2011 and increased by 6.8 percent in 2012. In reality, the growth of domestic demand was mostly propped by financial spending.

Many experts hold that as long as energy revenues continue to dominate the Russian economic landscape, there is slim possibility for Russia to transform from an energy export growth model to a higher value-added, more sophisticated growth model.

Russia’s economic fluctuations in the first half of 2013 were not an accidental phenomenon. They were the result of interrelated influences from a variety of domestic and international factors. Regardless of whether Russia’s economic fluctuation was caused by economic institutions, the external environment or any relevant human elements, there are some signs that the current trends will influence the country’s future economic tendencies. As such, they warrant further discussion and exploration.

 

II. Domestic Debates over the Economic Development Strategy

 

Changes in a country’s economic situation are tied to more than just objective material processes. They are influenced by the subjective judgments, inclinations and interests of those involved in the process, as well as onlookers. The development of a modern economy is actually an interactive result of both subjective and objective factors.

Strictly speaking, there are not too many principled economic policy differences between Russia’s leftist, centrist and rightist factions. Most experts approve of Russia’s economic achievements over the past 20 years, which have been the product of its energy advantages and domestic factors. Most experts also believe that the country has recorded economic growth and per capita income growth, even if the national economy has not reported development.

Centrist scholars, represented by international strategist Sergey Karaganov, usually view Russia’s economic strategies and policies as an interwoven political economic landscape, as well as a product of domestic and international interactions. Alexei Kudrin, former deputy prime minister and finance minister, is a representative liberal. Both Karaganov and Kudrin are inclined to view the first 10 years of the new millennium as the golden era of Russian economic development.

Russia has suffered fierce economic repercussions from the global financial crisis and it has not yet fully recovered from the crisis. Sergey Glazyev, President Vladimir Putin’s chief economic adviser and a representative of the traditionalist school, holds that the Russian economy has almost recovered to pre-crisis levels, but that current investment is only one third of the pre-crisis volume. Under such circumstances, it is impossible for Russia to further boost its economic advancement.

In Glazyev’s eyes, Russia’s economic growth target is less than half of the previous forecast, even though oil prices are 10 percent higher than expected. If inflation is taken into consideration, this means that the economy has come to a standstill. Glazyev stresses that Russia’s economy has already fallen into a recession and that there is absolutely no possibility for Moscow to realize the targets and tasks that it set for itself.

Generally speaking, various segments of Russian society share the view that Russia is already mired in economic stagnation, believing that the country must undertake arduous measures and efforts in order to address its fundamental issues. However, there is still fierce debate over how the Russian economy should move forward.

 

1. Debates over changing the status quo

When it comes to the general principles of current economic strategies and policy measures, liberals, traditionalists and centrists hold diverging views.

Liberal proposition

When Putin reshuffled his cabinet at the start of his third term as president, Kudrin wrote an article entitled “What We Expect from the New Government.” The article systematically stated his views on the current economic policies, raising ten issues related to Russia’s future economic policy and proposing corresponding solutions. The solutions that he outlined embody the “more freedom, more responsibilities” proposition shared by most liberals.

First, Kudrin writes that in order to guarantee long-term macroeconomic predictability and stability, the country’s budgetary rules must be reformulated and a strict restriction must be imposed on the use of oil and gas revenues and on the size of pure loans.

Second, the country must reform its state governance system, improve the working efficiency of state institutions and change the present situation in which reform measures are poorly implemented.

Third, the country must push to decentralize economic policymaking and improve the relationships between the federal, regional and municipal governments in order to empower local residents and assess and supervise government performance, reinstate local elections and transfer more federal financial resources to local authorities.

Fourth, everyone must work to propel investment growth and raise the ratio of fixed-asset accumulation from the current 22 percent to 27-28 percent, given that the existing fixed asset levels are far too low to accommodate technological innovation and overall infrastructural development.

Fifth, the country must reduce the excessive state presence in the economic sphere, protect private ownership and recognize that the state can only have a limited influence over economic activities. Furthermore, to facilitate the privatization of state-owned companies, they must expand the market economy and enhance the public supervision of the country’s major investment projects.

Sixth, the country must consolidate and boost infrastructure construction of productive, residential and public service projects and accordingly increase the ratio of their spending in the federal budget. To address the funding problem, the key budget departments need to undertake sweeping structural reforms.

Seventh, they must remove the administrative barriers that impede the flow of commodities and capital and promote convenience for commodity imports.

Eighth, Russia must enhance economic support for the development of human capital, the strengthening of education and corporate innovation and the reform of the country’s outdated budgetary system.

Ninth, in order to carry forward reforms of the labor market, the country must address its shortage of skilled workers and promote labor training and education.

And finally, Russia must improve its social security system.

Traditionalist proposition

Regarding Russia’s economic development strategy, Glazyev is entirely opposed to Kudrin’s views. As a representative figure of Russia’s leftist economists, Glazyev can in part represent most traditionalist scholars. To Glazyev, the ideas of market fundamentalists – namely, to optimize the investment environment and create conditions to protect corporate activities and ownership – are mere empty talk. The Cypriot crisis revealed that Russian oligarchs are major investors in the small Mediterranean nation. Due to their reluctance to pay taxes at home, these Russian magnates often transfer their money to foreign banks, a move that has cost Russia financial losses in the vicinity of 500 billion rubles per year. After staying abroad for a certain period, some of these funds flow back to Russia in the form of foreign capital. As such, these Russian oligarchs not only enjoy the preferential treatment extended by the Russian government to foreign capital, but also can avoid paying relatively high taxes on their returns.

This system has prevented the market and the state from playing their normal roles. According to Glazyev, the market collapse has been caused by the absence of a real market competition mechanism, while the perceived collapse of the state can be attributed to corruption, which causes the failure of the national regulatory system. In Glazyev’s opinion, these trends run counter to the “more freedom, more responsibility” advocacy among liberals.

Centrist proposition

As a representative of the centrist school, Karaganov shares very similar views with liberals on Russia’s economic strategies and policies. Karaganov emphasizes that Russia’s major economic task is to legalize privatization and private ownership. He values the significance of Asia in Russia’s economic development and has asserted that the complementary cooperation between Russia and Asia will present Russia with a vitally important development opportunity.

With regards to Russia’s future economic development strategy, Karaganov advocates a step-by-step path to press ahead with economic reforms. He holds that the slogan of “democratization and modernization” that emerged in 2009 has created ideological confusions among the public, and he has suggested that Russia should push forward political reforms and realize direct dialogue between the government and its opposition factions.

 

2. Debates over macroeconomic stability and investment

Russian Scholars from different academic schools are mostly in agreement on whether Russia should change its energy-dependent economic model. They say that the country must realize economic diversification as soon as possible in order to prevent itself from being excessively encumbered with the energy economy. They hold varying stances, however, on how to change macroeconomic politics and coordinate industrial development.

Kudrin has asserted that “[Russia] should finally realize economic diversification to extricate itself from dependence on the energy economy.” He notes that the Russian government and the central bank have carried out policies aimed at reducing Russia’s reliance on oil and gas-based fiscal revenues and laid an institutional foundation for some of the national oil and gas revenues to be held in reserve funds. But such a policy failed during the crisis. Kudrin has stressed that the Russian central bank should attach more importance to taming inflation and reducing interventions in the currency market in order to stabilize the macroeconomic situation.

However, from Glazyev’s perspective, the key question is how to guarantee and increase investment growth. By levying an export tax and resource exploitation tax on revenues from the energy and resource export sector and then allocating these sums to national reserve funds, Russia can make good use of these funds for capital accumulation abroad and possibly use them to spur domestic economic development. Glazyev believes that Western economic theorists analyze the economy mainly based on a 50-year mathematical model, holding that economic operations only take place among certain agents and thus naturally allow for free competition.

In such a state of equilibrium, these theorists claim that excessive issuance of paper currency naturally fuels inflation. But these models and theories have not taken Russia’s realities into account. At a time of crisis, economies usually plunge into a vortex and make it difficult to apply an established model. Glazyev thus lashes out against theorists who view the relations between investment and inflation as a firm or predictable set of variables, claiming that the idea that “if the price rises in a certain place, [it is] bound to fall elsewhere,” once expressed by Kudrin, is a deviation from Russia’s actual conditions.

Viewed as a dichotomy between leftist and rightist viewpoints, the former advocates the dominant role of macro-regulation in driving investment growth and promoting economic expansion, while the latter prioritizes taming inflation and maintaining macroeconomic stability, though it raises no objection to the use of capital accumulation through “energy exports in exchange for foreign exchanges” formula in order to wean the country from its energy-dependent model.

Centrists, on the other hand, do not really concentrate on the debate over whether to prioritize investment or stability. Instead, they focus on how Russia can acquire opportunities for sustainable development through its overall strategic layout.

 

3. Several issues concerning the direction of economic development

The leftist position, represented by Glazyev, explicitly advocates three ideas: put forward industrial policies, including a targeted tax cut; develop industries with a competitive edge; and ensure the regional advantages of the Russian economy through the establishment of the Eurasian Economic Community.

In Glazyev’s opinion, the industrial policy tool supported by long-term loans can be employed to assist the energy processing industry. The energy industry is not only an investment target but also an area to implement tax cuts. To this end, the value-added tax on the sector must be cancelled in order to free it from immeasurable tax increases.

Glazyev has noted that Russia boasts a number of high-tech industries that hold a sharp competitive edge on the world stage. The atomic energy industry, rocket and aerospace technology, laser technology, biogenetic engineering and nanotechnology can all provide impetus for Russia’s economic development. Without putting sufficient funds into these sectors, Russia will lag far behind in the new round of global technological revolution.

Glazyev emphasizes that Russia currently needs the state to break its own bureaucratic interests, especially when these interests benefit the state but go against the country’s economic development goals. The world is currently undergoing structural reforms, and new technologies are emerging and becoming more prominent. Over a three to five year period during which these technologies will be formed, the world economy will follow a new development course. Glazyev estimates that such a structure will record a 35 percent annual growth rate. He also states that by 2017 or 2018, when the new development path has taken shape, it will be very difficult for countries to embark on such a trajectory given the immense capital demands.

On the subject of future tax cuts and the development of high tech industries, there is no substantial disagreement among liberals, centrists and traditionalists. Cutting taxes is an inherent part of liberal economic policy.

However, the traditionalists hope to impose heavy taxes on profits reaped by monopoly enterprises from resource exports and exploitation, which follows a different principle from what the liberals advocate.

Unlike traditionalists, who attach great importance to the role of high tech and hold a very optimistic outlook on the sector, liberals and centrists advocate the formation of industrial advantages more through promoting competition between different industries, different new technologies and different businesses. On high tech issues, the key debate among different academic schools lies in the extent to which the state can interfere with future economic development. Liberals advise the country to slow down economic growth and even replace the 6 percent growth target proposed by Putin with a smaller four percent target in order to ensure macroeconomic stability. But Putin has dismissed these stances.

Concerning Russia’s accession to the World Trade Organization and the establishment of the Eurasian Economic Community, both liberals and centrists maintain a conservative attitude. On one hand, liberals do not want to come under fire for belittling the Kremlin’s painstaking efforts to join the WTO. But on the other hand, centrists pin high hopes on the prospect of the Eurasian Economic Community, even if they lack confidence on this particular issue. The establishment of the Eurasian Economic Community looks less attractive to young Russian elites, as Karaganov puts it.

Liberals and centrists have much in common when it comes to Russia’s economic development strategies. In recent years, Karaganov has aggressively advocated for the development of Russia’s Far East and Western Siberia and he views it as an opportunity for Russia’s future development. In Karaganov’s opinion, Russia’s innovation and development capabilities, honed through years of reform, have made it more than a mere energy exporter or market for other countries’ commodities. Russia’s former minister of economic development Yevgeny Yasin, as the spiritual leader of the liberal school, boldly proposed developing modern agriculture as a major industrial category to replace the energy-dependent economy. This is different from the leftist scholars who place more emphasis on the development of the high tech sector as the engine for development.

 

III. Economic Development and the Relations between Government and Elites

 

Interactions between elites and politicians have long been the key to the developing societies that are under transformation. The Russian economy is filled with complex interactions between the government and elites. Some of the Putin administration’s policy initiatives can obviously find their traces in the aforementioned debates.

First, as economic adviser to the president, Glazyev wrote to Putin at the end of 2012 elucidating his vision for Russia’s economic development. He asserted that the Russian economy, under the precondition of a series of policy reforms, should and could expand by 7-8 percent, instead of the 2-5 percent predicted by the liberals. In the end, Putin dismissed a growth rate below 4 percent and instead embraced a 6 percent growth target.

Second, on spurring the Russian economy through the development of high value-added industries (such as high tech, military, transportation, etc.), the economic thoughts of Glazyev and Dmitry Rogozin have been visibly embodied in the decision-making of the Putin administration. For example, when assuming the presidency on May 7, 2012, Putin signed the Presidential Decree of May 7th, “About key measures for the improvement of the state governmental system.” This is an example of the influence of Glazyev and other economic policymakers on the Russian government.

Third, Putin’s economic thinking is not an incarnation of a single political proposition based on a singular economic principle; rather, it is a combination of various economic ideas. He refuses to label Russia as a form of “State Capitalism,” but resolutely insists on allowing the state to play its role in regulating the economy. Putin has proclaimed himself a liberal more than once and has proposed protecting the private sector. But he is also firmly opposed to the annexation of state assets by the private sector. Putin’s views on some specific development strategies can be reflected by his proposals. For instance, Putin endorses the development of the Far East and Western Siberia, but he remains particularly cautious when it comes to implementing specific strategies or tactics on this issue.

With respect to Russia’s future development direction, the energy-dependent growth model needs to be reformed, but this is not a process that can be realized overnight. Furthermore, under the current model, Russia still has huge potential for growth. Russian elites from different academic schools insist on their different stances, but they also share a similar perspective on the country’s development model as well as on some specific policy proposals. Their similar stances on the development of the Far East and Western Siberia, for instance, can offer Russia a good pathway for development. Despite their disagreements on whether to prioritize macroeconomic stability or boost development, people on the left and right still share quite a few similar opinions.

The various schools of Russian elites actually have more in common than meets the eye. In September 2013, Russian Prime Minister Dmitry Medvedev published an article entitled “The Time for a Simple Solution has Passed.” Although it did not prompt the same sweeping response as a previous article entitled “Go, Russia!” that he published during his presidency, the message conveyed in the later article is just as important.

Medvedev first clarified the scope of government responsibility, stressed his status in state management and decision-making and reiterated the importance of the cabinet in guiding and regulating national economic and social activities. At the same time, he candidly admitted and criticized a series of government shortcomings, remarking that “our support for expanding production is only based on the implementation of a series of major investment projects with state participation or involvement from state-controlled companies. Our increased subsidies to a series of economic sectors are also based on the hike of energy prices.” He asserted that Russia must realize economic modernization and extricate itself from its energy-dependent model in order to make itself a developed economy with a sharp competitive edge and narrow the gap with other developed countries. Protecting private property rights and lifting competitiveness remain priorities of the national economy.

In the article, Medvedev held that businesses should be given maximum freedom to act and the country should raise labor productivity, and improve resource efficiency and the quality of state administration. He also stated that Russia should develop an innovative economy, set up the Skolkovo Innovation Center, materialize the innovative investment program and improve its investment environment. He added that Russia must boost the efficiency of how it uses state funds and strengthen efforts to absorb foreign capital.

As a whole, Russian government and academic spheres share same stances on many issues. They both propose that the market should play its role while upholding the dominant role of the state, and that Russia should pursue economic diversification while overcoming its over-reliance on energy exports. They also agree that an austere fiscal policy should be adopted and more sources of revenue should be created, all while firmly backing the development of key industries. Nonetheless, a critical challenge lies ahead: translating these consensuses into practical and feasible strategies and tactics.

 

 Source: China International Studies January/February 2014 139-158

0